The underground storage of natural gas is a regulated activity whose operation has been awarded under concession to
Galp Energia.
Remuneration model
The regulatory asset base is currently valued at €18 million, remunerated at a rate that is now set at 8%. The concession of this activity has been awarded for a period of 40 years until 2046. The regulatory model which is applicable to this activity follows the same method as the one applied to the regulation of natural gas distribution.
In Portugal, Galp Energia is the company that has been awarded the geographically largest concession. In addition, it has explicitly been awarded the right to expand its storage activity.
Recent social and political developments have emphasised the importance of access to storage capacity in order to ensure the continuity of natural gas delivery to clients, in an increasingly transnational or, in the case of Galp Energia, Iberian logic.
Regardless of the future structure of the market for natural gas, the access to storage capacity and the title to concession rights enabling the construction and operation of this type of facilities will be a valuable asset for Galp Energia.
At the end of 2010, a cavern – called TGC 1S – with a storage capacity of around 40 million cubic metres was in operation. Construction of a second cavern – called TGC 2 – with a storage capacity of around 71 million cubic metres continued in the year with its completion scheduled by the end of 2012. In 2010, the Company completed engineering work on two additional cavities – TGC G1 and TGC G2 –, along with the acquisition of materials and equipment. The two cavities, which will have a combined storage capacity of close to 118 million cubic metres, are scheduled to come into operation in 2016 and 2019.